Facts
The Petitioner challenged an order passed under Section 148A(d) and a consequential notice issued under Section 148 of the Income Tax Act, 1961, dated 26.07.2022 for Assessment Year (AY) 2013-2014
Source reference: p. 1-2Originally, a notice was issued on 25.06.2021 under the old regime during the extension granted by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA)
Source reference: para. 3Following the Supreme Court’s ruling in Ashish Agarwal, this notice was treated as a show-cause notice under Section 148A(b)
Source reference: para. 4The Revenue provided information on 31.05.2022, and the Petitioner replied on 01.07.2022
Source reference: para. 7The Assessing Officer subsequently issued the impugned reassessment notice on 26.07.2022
Source reference: para. 9Issues
1. Whether the reassessment notice issued under Section 148 of the Income Tax Act on 26.07.2022 is time-barred and invalid based on the "surviving time" principle
Source reference: para. 2, 7Law Applied
The court primarily applied the "surviving time" doctrine established by the Supreme Court in Union of India v. Rajeev Bansal [2024], which dictates that for a reassessment notice under the new regime to be valid, it must be issued within the balance of the limitation period surviving from the original TOLA extension
Source reference: para. 5, 9Procedural directions from Union of India v. Ashish Agarwal regarding the transition of notices from the old regime to the new Section 148A framework
Source reference: para. 4Dhanraj Govindram Kella v. ITO [2025], which calculated specific limitation deadlines for AY 2013-2014
Source reference: para. 6Reasoning
The court analyzed the timeline to determine if the "surviving time" for limitation had lapsed. It noted that the original notice was issued on 25.06.2021, leaving a specific number of days remaining until the TOLA deadline of 30.06.2021
Source reference: para. 7Calculating the stay of limitation during the Ashish Agarwal implementation process (from the date of information supply on 31.05.2022 plus the mandated response time), the court determined that the "surviving time" for the Revenue to issue the Section 148 notice expired on 17.07.2022
Source reference: para. 7Since the respondent issued the impugned notice and order on 26.07.2022—nine days after the deadline—the court found the entire proceeding to be hit by limitation
Source reference: para. 9The Revenue could not offer a counter-argument to these verified dates
Source reference: para. 8Holding
The Court held that all notices issued beyond the "surviving period" are time-barred and invalid as per the mandatory guidelines set in Rajeev Bansal
The High Court allowed the writ petition and quashed the order dated 26.07.2022 passed under Section 148A(d) and the notice dated 26.07.2022 issued under Section 148, setting aside all subsequent reassessment proceedings
Source reference: para. 10Original Court PDF
SONALBEN CHETANBHAI GADHIYAvsTHE INCOME TAX OFFICER, WARD 3(3)(1), SURAT
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